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Jan 15
2010

SAP caves to pressure, offers cheaper support package

Posted by MQuinn in SAPpricingmanagementbusiness support

MQuinn

Score one for the customer. Business management software maker SAP unveiled a new, tiered support system on Thursday with cheaper options, caving to pressure from users.

The new model will offer all customers a choice between its customizable enterprise support package and a cheaper, standard package with basic support functions.

SAP also delayed hiking the maintenance fee on the enterprise package for existing customers for a year. The maintenance fee will ramp up from 18.36 percent this year to 22 percent in 2016. New users will be charged the 22 percent fee. The standard package comes with an 18 percent fee.

The Germany-based company had previously been trying to hike prices on some of its customers that used its older software to mitigate sliding sales. It reported Thursday that software and related sales fell 3.2 percent to 8.19 billion $11.9 billion in 2009).

Of course, passing along fee increases to customers looking to cut costs during the economic downturn faced stiff resistance.

Still, some wonder if it's too little, too late.

"They have a very frustrated customer base," said Patrick Walravens, an analyst at JMP Securities, told Bloomberg. "SAP has done the right thing by giving choice of maintenance programs, but SAP only did the right thing after exhausting all the alternatives."

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